OPEC ‘powerless to prevent’ oil prices getting to $100 a barrel this year

OPEC kingpin Saudi Arabia is ill-equipped to prevent a supply shock in the energy market, analysts told CNBC on Monday, as oil traders prepare for the possibility of $100 a barrel before year-end.

Late last month, President Donald Trump urged OPEC producers to ratchet up production levels to prevent further price rises ahead of the mid-term elections in early November.

OPEC and non-OPEC producers were initially thought to be reluctant to immediately respond to heightened pressure from the Trump administration, but Saudi Arabia is now expected to put as much as 550,000 additional barrels per day (bpd) onto the market over the next couple of months.

The kingdom has previously claimed to have around 1.5 million bpd available to add to the market if required. But, Riyadh is thought to be unable to fully offset global supply disruptions over the coming months. And “this essentially leaves the world’s only swing producer powerless to prevent a supply shock and subsequent price spike in the final quarter of this year,” analysts said.

Source: Hellenic Shipping News

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